Can you please share more details on the ‘rumor’ plz
I cannot help myself from being extremely extremely critical of the argument presented by Rana Kapoor yesterday on CNBC. He said that the SEBI mandate to keep the QIP open for 3 business days (even though it may be oversubscribed on day1 itself) caused some confusion with the investors which led to stock price volatility (which meant price fell below QIP price) and the eventual deferment of the QIP.
I mean seriously - do you expect us to buy such statements from a bank which has stunned (cuz the markets have re-rated it over the past 4-6 months) the markets with excellent reported numbers over the past few quarters.
He also completely side-stepped two questions of the anchors:
- Were the SEBI rules changed recently?
- Weren’t the book running lead managers/merchant bankers aware of the SEBI rules before the QIP? (And we’re talking of some pedigreed bankers here).
Infact I think even the anchor couldn’t believe what rubbish this guy is talking, so before asking the question she actually said “Sir, this is out of complete respect for both you and the bankers, but I have to ask this”
This should be investigated by SEBI in my opinion. I always read about people suggesting possible management quality issues for Yes Bank but it kept on (and still continue to) delivering the numbers which changed my opinion very recently about this company (or you can say the market re-rating changed my opinion).
But these kind of non-sensical arguments from the CEO are either hiding the truth from people or being dumber than Jim Carrey’s character in Dumb and Dumber. Either case, unpardonable.
Disc - No holdings
3 Likes
Simple, the promoter has been greedy as always. Appointed every banker as lead manager for the issue.Obviously there will be race to get better price for the issue since it will come back in the market every 2/3 yrs. Who would not want this relationship. Somewhere ‘price managers’ took it to too high a level and market ‘understood’ the gimmicks. Hilarious is that the promoter thinks 'global investors will buy yes bank paper at any value since India is growing. Somewhere they thought that they could fool FIIs easily.
1 Like
Read more about the QIP Fiasco here
Also sharing a few paragraphs directly from the link above.
Where Was The Lapse?
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, cited by Yes Bank in its exchange filing, require that a listed company must give the stock exchange prior intimation of at least 2 working days in the case of any board meeting called to decide on fund-raising matters.
Yes Bank’s filing on September 7 met this regulatory requirement of giving the stock exchange prior notice of at least 2 working days. BloombergQuint was not able to ascertain what ‘misinterpretation of new QIP guidelines’ Yes Bank was referring to.
It’s also not clear why on September 8, at 3.41pm Yes Bank informed the stock exchange that to be in compliance with regulations ‘the issue price of the QIP cannot be determined prior to the aforesaid meeting on September 12, 2016. Accordingly, the Bank is required to keep the issue open till September 09, 2016.’
Because on September 7, the Bank had itself disclosed, in its filing with the stock exchange, that the issue price would be determined on September 12.
Tejesh Chitlangi, partner at law firm IC Legal told BloombergQuint in an email communication that there was no legal or regulatory requirement for the QIP to be kept open till September 9. Referring to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 he said,
The Regulation 29(1) read with Regulation 29(2) only requires a clear notice of 2 working days (excluding the notice day and board meeting day) to be provided which was duly done by Yes Bank. There was no requirement for the issue to be kept opened till September 9, 2016 as was stated by Yes Bank in its today’s first BSE filing (at 3.41pm).
Tejesh Chitlangi, Partner, IC Legal
Chitlangi added that “no amendment has taken place in SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as well as ICDR Regulations off late which could have given rise to any interpretation issue.”
A BloombergQuint query sent to Yes Bank seeking clarity on the specific regulation that required the QIP to stay open for three days was not answered.
A few investment bankers and lawyers BloombergQuint spoke to were unable to identify a regulation that could have forced the bank to defer the issue. They alluded to insufficient demand for the QIP as a possible reason for its deferment, but BloombergQuint was not able to confirm that with Yes Bank or any of the investment banks managing the QIP.
Yes Bank maintains that the QIP was fully subscribed by Thursday morning.
1 Like
Hi,
Given all the events why is Yes bank management being blamed here? They started QIP offer when price was high which any company owner would like to do. Later during the offer period when the stock price fell below band price investors pulled out their bids so Yes bank had to defer the QIP.
So why are management being blamed for greed or wrong doings? Just trying to understand.
Everybody knows that the reason is stock price being below QIP price… but the way CEO blamed SEBI regarding the clauses is unacceptable… He is behaving kiddish regarding regulatory requirement. They had army of merchant bankers and they blame on SEBI…
I guess people are pissed off with handling of the situation.
3 Likes
Has the management admitted this? They have given a bunch of media interviews but I have not seen this admission from the management. Why can’t the management admit this simple truth? It would have been better in my opinion if the management just stayed quiet rather than try to push the cause of their unsuccessful QIP down SEBI’s throat.
Don’t think I can put it much better than @seeankur
1 Like
Yes Bank’s aborted QIP under Sebi scanner
(Sebi is investigating whether its listing norms were breached in Yes Bank’s QIP offer, and the possibility of insider trading in the lender’s stock)
1 Like
Can experts kindly give their views.
UBS has been unusually truthful in this report. In short they are saying “we do not trust your numbers”. This is a very serious reputational risk either for UBS or yes bank 
Earlier also, they had scanned MCA docs to conclude that YB is under reporting NPAs.
Disc: No holding
3 Likes
I believe RBI itself did the asset quality check on Yes bank. Seems to be a case of paid report generating shorting opportunity for traders.
Disc
Holding for 4 yrs
Ha ha you seem to be too much of a believer in RBI’s capabilities. Often non performing PSU guys get kicked upwards in the RBI. Why did not they stop absolute mayhem in PSU banks? RBI is a stakeholder in PSU banks.
3 Likes
I just made a comment on trusting RBI as such. However I trust Yes bank nos and there may be some perceived issues which may or may not pay out. Predicting future of this bank is like predicting markets. In my opinion of whatever I have observed as an investor in last 4 yrs I guess it has the making of good second rung Kotak/HDFC bank.
Disc
Invested
2 Likes
One more question -Can we trust UBS report?
Ubs has a past history with YES BANK. They had come with a negative report on yes bank know in August 2015, however Yes bank had defended their case . If the fundamentals are a problem, then I would wait for some criticism from other research houses as well. Also I am sure the mgmt will give a clarification and fight it out as they had done previous year.
2 Likes
Got out of this one a while ago when the bank declared the NPA numbers and it was better than HDFC bank!!
1 Like
Media report on Yes Bank’s q2 results-
Private sector lender Yes Bank’s second quarter earnings surpassed analysts’ expectations on Thursday, with the profit rising 31.3 percent year-on-year to Rs 801.5 crore despite higher provisions. Sequential growth was 9.5 percent. Net interest income, the difference between interest earned and interest expended, during the quarter grew by 30.5 percent to Rs 1,446.2 crore year-on-year on the back of robust growth in advances and CASA. Net interest margin inched up 10 basis points to 3.4 percent on yearly basis but on sequential basis, it was unchanged. Yes Bank said advances in Q2 registered a 37.7 percent growth year-on-year and 4 percent quarter-on-quarter while deposits grew by 28.9 percent and 4.4 percent in same periods. Corporate banking accounted for 67.9 percent of the advances portfolio, while retail & business banking constituted 32.1 percent during the quarter. Profit was estimated at Rs 770.1 crore and net interest income at Rs 1,379 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. CASA (current-saving account) growth during the quarter was 53.2 percent YoY and 6.9 percent QoQ with CASA ratio crossing 30 percent mark for the first time to 30.3 percent (up 25.5 percent in Q2FY16), the bank said in its filing. Other income (non-interest income) shot up 43.6 percent to Rs 887.85 crore and operating profit rose by 36 percent to Rs 1,386 crore on yearly basis. Provisions for bad loans increased substantially by 55.6 percent year-on-year to Rs 161.7 crore but fell 21.7 percent sequentially. Provision coverage ratio improved to 64.8 percent at the end of September 2016 from 64.2 percent in September 2015. Cost to income ratio also improved to 40.6 percent from 41.1 percent while credit cost declined at 11 basis points against 15 basis points on QoQ basis. Asset quality was stable during the quarter with gross non-performing assets as a percentage of gross advances rose 4 basis points to 0.83 percent QoQ. Net NPA was unchanged at 0.29 percent during the same period. In absolute terms, gross NPAs for the quarter increased 8.5 percent to Rs 916.7 crore and net NPAs climbed 6.8 percent to Rs 323 crore compared with preceding period. Yes Bank said total standard restructured advances as a proportion of gross advances were at 0.46 percent in Q2FY17, down from 0.71 percent in same period last year with no additional restructuring during the quarter. During the quarter, the bank sold one account to an asset reconstruction company. Strategic debt restructuring outstanding exposure was 0.03 percent to gross advances at the end of September 2016, with no additional SDR during the quarter, the bank said, adding it refinanced one account through 5:25 route with outstanding exposure of 0.09 percent of gross advances.
The numbers look extremely encouraging.
1 Like
Per Livemint, India’s largest credit card data breach has its origins at Yes Bank ATMs, that are managed by third party (Hitachi). Seems Indian banking system was unaware for 3 months. Final report on forensic investigation results may be out only in Nov.
For the record, Yes bank has said there there are no security breaches in their own systems. Not sure on the legal, financial and other impact. More will be known in the coming weeks.
~ Bramha
PS: No holdings
This is an interesting development. Its effect on stock price is what remains to be seen.
Disc: invested in yes bank
Yes Bank has raised Rs 3000cr through the issuance of bonds.
Positive-
- Company has money in hand now for fund expansion
-Negative
- The cost of funds is 9.5, which is not cheap.
-Demonetization has increased company’s CASA . I think this quarters could be one of the best for CASA growth, in line with the overall banking industry.
With half of the money they wanted to raise through QIP few months back, I think the bank would not be very keen on another QIP, which is the good the news as well as bad news.
The good news in a sense that equity won’t be diluted.
Bad news - Current Book value of the company is 385 and with $1 billion at 1300-1500 range would make the book value to approximately 500. So the current price of 1100-1200 does not look expensive.
Can someone shed light on business implication for Yes Bank raising 3000cr in the mid to long term?
Cost of funds at 9.5% appears to be very expensive when we expect interest rate on housing loans to be under 9% in 2017. Unable to comprehend.
Disclosure: invested since long.